The trend is not yet extreme. There is room still for it to continue. When Oil trends strongly, ADX can remain above 35 and above both directional lines for several days before the trend ends.

There is some concern today that the next movement down is not yet underway. The correction which price moved into on the 15th of March may still be underway. Slight divergence at the last low between Stochastics and price, and RSI and price, looks slightly bullish. The long lower wick on the candlestick for the 22nd of March looks bullish.

ELLIOTT WAVE ANALYSIS

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If the Elliott wave count is correct, then the correction should be over. If it were to continue, then it would be grossly disproportionate to subminuette wave ii.

While the longer term trend looks clear, the shorter term trend is not so clear. This can often be the case at the end of corrections within a larger trend.

Divergence with price and RSI, and Stochastics, indicates weakness at highs. This indicates caution for long positions. There is a level of risk here that is not small.

ELLIOTT WAVE ANALYSIS

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The normal range for cycle wave b is from 1 to 1.38 the length of cycle wave a. The structure of cycle wave b is close to completion. If cycle wave b reaches twice the length of cycle wave a, the wave count should be discarded based upon an extremely low probability. That point is above 10,624.

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The weekly chart shows all of intermediate waves (A)-(B)-(C). The structure is an incomplete zigzag. The daily chart below shows all of minor wave 5 within intermediate wave (C).

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Minor wave 5 is unfolding as an impulse and its structure is incomplete. Within minor wave 5, minute wave v may be extending. There is no Fibonacci ratio between minute waves i and iii, so it is more likely that minute wave v will exhibit a Fibonacci ratio to either of minute waves i or iii.

Within the middle of the third wave, micro wave 2 may not move beyond the start of micro wave 1 below 7,263.62. However, the probability of this wave count would substantially reduce if the green channel is breached before this price point is passed.

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3 thoughts on “Trading Room – 27th March, 2017”

Here is what I believe to be a valid alternate count for USOIL. It removes what might be the developing disproportionate lengths between waves subminuette ii and iv.

I use a 4 hour time frame, so candles will not be the same as presented by Lara. The count is assumed to be the same as Lara’s up to Subminutte ii. In the proposed count the low of March 14th is end of Minute iii, not Subminuette iii, and since that date Oil has been in a Flat correction for Minute iv. The low on March 27th could signal the beginning of movement upward (Minuette c) to complete the flat.